Parents can start by combining savings tools like ABLE accounts and trusts with government benefits, community resources and long-term planning for housing, care and decision-making. Even small steps can help build financial security over time.
Learning Center / Financial Planning / How to Start Lifelong Financial Planning for a Child with Disabilities
How can parents start financial planning for a child with disabilities?
Key takeaways
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Start small if you need to. Even modest savings can grow over time and help cover future care, education or support needs
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Explore tools designed for families, including ABLE accounts, Special Needs Trusts, HSAs and 529 plans
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Look beyond your own budget. Government programs, Medicaid waivers, nonprofits and local resources may help with everyday costs and care
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Make a long-term plan early, including who can support your child, where they may live and how their needs may be met in adulthood
For many families, the cost of raising a child with disabilities in the United States can be staggering, reaching up to $2.4 million, and the financial responsibility often extends well into adulthood, when aging parents may no longer be able to provide care.
Although these expenses may seem daunting, thoughtful financial planning empowers parents to ensure their children receive the support they need throughout childhood and into adulthood. This is especially important as individuals with disabilities face poverty at twice the rate of those without disabilities.
“There are several different ways that you can be investing for your child and putting money aside for very specific purposes that they’ll need throughout their life,” said Mandy Kelso, Head of Financial Education at TD Bank U.S.
Here are eight actions parents can take to help strengthen their financial preparedness when caring for a child with a disability.
What is an ABLE account and why is it so beneficial?
ABLE savings and/or investment accounts allow eligible individuals with qualifying disabilities to save money while maintaining eligibility for certain government benefit programs, subject to applicable program rules.
with qualifying disabilities to save money without jeopardizing access to government programs. In 2026, up to $20,000 can be directly deposited into an ABLE account by a person with a disability or by their family and friends. Earnings in ABLE accounts may grow on a tax-advantaged basis, and qualified withdrawals are generally exempt from federal income tax. Consult a tax professional regarding your specific situation.
Funds in ABLE accounts may be used toward eligible expenses associated with a child’s disability, including education, transportation, home modifications and direct support services.
If possible, consider making regular contributions to an ABLE account. Even modest contributions over time may help build funds for qualified disability-related expenses. Family and friends may also choose to contribute, subject to applicable program rules and contribution limits.
Why should I set up a Special Needs Trust for my child?
A Special Needs Trust may be a practical solution, as the assets are managed by the trust instead of being owned directly by the individual with disabilities. Even if you don't fund the trust immediately, setting it up while your child is young can be advantageous.
This type of trust can be named as the beneficiary of a parent’s estate, life insurance policy or legal settlement. To determine whether a Special Needs Trust is suitable for your family, it's important to consult with legal and financial experts who can provide personalized advice.
Where can I find government resources?
Many programs are available to support children with disabilities. Two of the most well-known federal options are Supplement Security Insurance (SSI) and Medicaid. Eligibility for these programs is often based on family income.
Some states offer Medicaid waiver programs, which enable children to receive Medicaid benefits regardless of their parents’ income. Many of these programs cover expenses not typically covered by private insurance, including copays, diapers and specialty equipment. If you are not sure where to start, consider contacting your state's Medicaid office, disability services agency, or local government resources for guidance. Some counties offer additional support programs, like cash grants for those who qualify, so it can be helpful to contact your local government for more information.
What help can nonprofit organizations provide for families with disabilities?
Check to see if your community has any nonprofit organizations that offer low-cost or free respite care, used medical equipment or affordable services like speech therapy. Connecting with other parents of children with disabilities directly or via social media or online forums can be one of the most helpful ways to discover these resources. A local children’s hospital or pediatrician’s office may also offer recommendations.
Is an HSA a good way to save money?
Health Savings Accounts (HSAs) also can be a great way to save for a child’s future health needs. An HSA lets you put money aside before taxes to use for qualified medical expenses. HSA accounts can be set up through a bank and other qualified financial institutions. Many employers also offer HSA programs as a feature of their benefits packages. Mandy noted that both a surviving spouse and a child with disabilities can inherit the HSA, although the tax treatments of the inherited HSA can differ depending on the beneficiary.
“An HSA is a critical tool for helping your entire family prepare for later in life when both parents and the adult child with a disability may face an increase in medical expenses due to natural aging,” Mandy said.
Parents may also consider regularly setting money aside for costs that may not be covered by health insurance or an HSA, such as travel expenses for out-of-state specialty care or missing work to take your child to doctor's appointments or to stay with them during a prolonged hospitalization.
Where can I find aid for programs to help my child?
Identifying and enrolling your child in the most appropriate support programs as early as possible can offer significant benefits for their future development. It is important to thoroughly research each program to ensure it holds proper accreditation and meets established quality standards.
While educational and therapy programs can sometimes be costly, many provide financial assistance such as income-based discounts, scholarships or insurance coverage. Be sure to inquire about these opportunities, because what may initially seem unaffordable could be within reach with the right support.
As individuals with disabilities move beyond childhood, they and their families can explore a variety of adult educational opportunities. Trade schools provide valuable training for future careers, and many colleges now offer specialized programs that make higher education more assessable. To help manage costs of education, a 529 Savings plan can be a smart and practical choice.
Why do I need to budget for respite care?
Caring for yourself is just as important as caregiving for your child, especially if your child has a disability and extra needs. Being a caregiver can be tough, both emotionally and physically, so it's important to take breaks and recharge. Some states offer support programs for children with disabilities and their caregivers such as the New York Office for People with Developmental Disabilities, which points families to myriad resources and programs for caregivers.
Finding the time to relax isn't always easy, and it can become expensive, especially if your child needs special care. Setting aside funds or finding family support for respite, even if it's just for a few hours once or twice a year, can make a big difference. Some families help each other by swapping caregiving duties, allowing everyone to rest without extra expenses.
How can I plan for my child's future when it's so painful to think about?
It’s critical to plan for your child's future when you are no longer able to take care of them. If your child, no matter their age, has a job or earns money, you might want to help them open a Roth IRA. This type of account lets them deposit money they earned working, whether from a traditional job or self-employment. Since Roth IRA contributions are made with after-tax dollars, withdrawals may be available under certain circumstances. Families should consult a tax or financial professional regarding applicable rules and eligibility requirements.
When thinking about estate planning for a child with disabilities, parents also should consider where their child will live, whether their child can make important life decisions and if not, who will make those choices. It is also helpful to think about the roles that siblings and other family members might play in supporting your child.
“Making these plans is difficult,” Mandy said. “But it’s important to do so when you can, so that your child can live the most independent life possible. That ultimately is what we all want for our children, whether they are disabled or not.”
FAQs
Start with what feels manageable. Even small monthly savings can help build a foundation, and families can add more tools and support as they learn what their child may need over time.
ABLE accounts and Special Needs Trusts may help families set money aside while protecting access to certain government programs. Because rules can vary, it is a good idea to speak with qualified legal and financial professionals.
Families may be able to find help through SSI, Medicaid, state waiver programs, local nonprofits, children’s hospitals, community groups and other parents who have already navigated similar needs.
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